Semiconductor stocks look relatively weak as S&P 500 attempts record, chart shows

MW Semiconductor stocks look relatively weak as S&P 500 attempts record, chart shows

By Christine Idzelis

Nvidia's 'technical picture may be improving, but the picture for the semiconductor sector isn't as strong,' says Bespoke

Semiconductor stocks are rising this month, but the sector is relatively weak compared to the S&P 500 despite Nvidia Corp.'s recent surge, according to Bespoke Investment Group.

The S&P 500 SPX was trading up in record territory on Wednesday at around 5,777, with financials posting the biggest sector gain at 0.8%, according to FactSet data, at last check. Shares of semiconductor giant Nvidia $(NVDA)$ were down 0.4% Wednesday afternoon, paring its October surge to around 9%.

Nvidia's "technical picture may be improving, but the picture for the semiconductor sector isn't as strong," Bespoke said in a note emailed Wednesday. The "Philadelphia Semiconductor Index" has been "hung up at resistance all summer" despite rallying above its 50-day and 200-day moving averages, the firm wrote.

Looking at the semiconductor index, "September's selloff was deeper than August's relative to the S&P 500, and the subsequent bounce back has also been weaker," Bespoke found.

The PHLX Semiconductor Index SOX, which trades under the ticker SOX, was up 0.5% Wednesday afternoon, while the Invesco PHLX Semiconductor ETF SOXQ was climbing 0.7%, according to FactSet data, at last check.

"One bright spot for the sector is that the early September selloff wasn't as deep as in August," said Bespoke, explaining that although the Philadelphia Semiconductor Index "may not yet be at the point of making higher highs, there has been a higher low."

Meanwhile, the iShares Semiconductor ETF SOXX, an exchange-traded fund that tracks an index of U.S.-listed semiconductor stocks, was up 0.7% in afternoon trading Wednesday.

Despite climbing 1.6% so far in October, the ETF's shares were down 9.7% over the past three months as of Wednesday afternoon. By contrast, the S&P 500 has climbed 3.6% over the past three months, according to FactSet data, at last check.

The U.S. stock market was up Wednesday afternoon, with the Dow Jones Industrial Average DJIA rising 0.8%, the S&P 500 gaining 0.5% and the tech-heavy Nasdaq Composite COMP advancing 0.3%.

The S&P 500 was trading above its record closing high of 5,762.48 logged on Sept. 30, according to FactSet data, at last check. The U.S. equities index has rallied 21.1% so far in 2024, slightly trailing the 22% year-to-date gain for the iShares Semiconductor ETF as of Wednesday afternoon.

-Christine Idzelis

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

October 09, 2024 13:28 ET (17:28 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.